Rs40b fine on mills termed 'wrong'
While pushing for sugar price deregulation and keeping just strategic reserves, the PM aide noted that prices of other crops such as rice were not controlled. Photo: File
Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan on Tuesday said that a fine of Rs40 billion on sugar mills imposed by the Competition Commission of Pakistan (CCP) was "politically motivated" and was totally wrong.
He ruled out that sugar millers were involved in recent prices hike; rather he argued that the price surge was due to a 20% decline in sugarcane output instead of market collusion.
Talking to journalists after attending the Auto Parts Summit 2025, organised by the Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam), the PM aide accused the former CCP chairperson of casting a double vote in the decision to impose the fine of Rs40 billion on sugar millers.
"I challenge the CCP's decision about sugar mills, which is 100% wrong," Haroon Akhtar said and advocated the "deregulation of ex-mill sugar prices" while the government should only keep reserve stocks.
"The sugar price solution lies in deregulation," he said and dismissed the talk that the decision for sugar export was behind the price hike. He elaborated that the country had a two-year surplus of 1.5 million tons of sugar when the government allowed the commodity's export.
The government kept 0.5 million tons as strategic stock and allowed export of 0.7 million tons. When the new crushing season started, the country had still surplus of around 0.5 million tons.
Haroon Akhtar said that the subsequent 20% drop in sugarcane output pushed down sugar production by about 1.4 million tons, triggering market tightness. "Mills are dispatching sugar at around Rs167 per kg," he said, adding that they had made borrowing at nearly 22%.
While pushing for sugar price deregulation and keeping just strategic reserves, he noted that prices of other crops such as rice were not controlled. "Industries grow when the government exits price control," he remarked.
The special assistant added that the commission's stock analysis was "entirely flawed" and the tribunal had sent the order back. He questioned the voting process, alleging that there was a split decision where the then chairperson cast an additional vote.
He stressed that sugar was exported under a transparent process, which brought about $450 million in foreign exchange.
The PM aide also raised question about appointments in Utility Stores Corporation (USC) and stressed that the government would release overdue salaries of USC employees soon.
He announced the launch of a Voluntary Separation Scheme for permanent, temporary and daily-wage staff, with compensation for contract workers as well.
Regarding Pakistan Steel Mills, Haroon Akhtar said that the government wants to revive the entity through public-private partnership. A feasibility study is likely to be completed and the decision will be taken based on the study.
Speaking earlier as chief guest at the Auto Parts Summit, the special assistant to the PM said that the government was committed to enforcing the New Energy Vehicle (NEV) Policy 2025-30.
He said that the government was going to introduce a vehicle certification law that would mandate safety testing for both locally produced and imported used vehicles. The imported cars failing to comply will be sent back and the domestic ones will have to meet specified standards before launch.
Pakistan has signed the 1958 UN convention, which requires compliance with 169 standards. He said the country had so far met 17 standards and would expand coverage beyond four-wheelers to two- and three-wheelers as well.
"The government's goal is not to shut car manufacturers or make vehicles expensive. Our task is to bring advanced policies," he said, adding that they were working to introduce an updated auto policy next year alongside the existing EV framework.
Akhtar said seven major carmakers were producing vehicles locally and more than 1,200 auto parts manufacturers were also operating in the country. "The auto and parts ecosystem contributes about 3% to GDP and supports over 2.5 million jobs," he said and acknowledged the expensive energy, limited access to technology and financing.
The government has reduced interest rates and energy prices and is steering towards export-led growth, Akhtar said and urged manufacturers to invest in R&D and modern technology to meet global quality benchmarks.
Regarding recent engagements with Chinese firms and the visit to Tokyo, the PM aide said that Japanese officials had raised concerns about tariff protection. He pointed out that prior tariff measures were aimed at curbing imports and raising revenue, which incidentally provided protection.
He added that the forthcoming industrial policy would set the direction on taxation, interest rates and energy tariffs. It will also pitch Pakistan not merely as a market but as an export base. "Build vehicles of that quality here and export from Pakistan," he said.
While addressing the summit, auto parts makers criticised the government for protecting the import of used cars. They also denounced the lack of political stability and inconsistency in policies that halted growth in the auto sector.
Paapam Chairman Usman Malik said that developed countries were protecting their auto industries and even the United States was saving its industry through tariffs.